There is still an incredible amount of uncertainty surrounding the Oregon Corporate Activity Tax (CAT).  While many answers remain unknown, here's an update to clarify some of the questions we've been hearing:

  • Businesses are not required to register for the CAT until they reach $750,000 in Oregon Commercial Activity
    1. Registration will be required annually
  • Commercial Activity will be assigned to Oregon based on where the product or service is delivered
    1. There will NOT be throwback
  • Estimated payments are not due until there is actual tax liability.  (First due in the quarter where their taxable activity after deductions and exemptions exceeded the $1M exemption.)
  • Cost Inputs and Labor deductions will likely be apportioned to Oregon following the current Oregon Income Tax apportionment rules
  • In determining the common ownership of unitary entities, the Department of Revenue believes that they will be applying the federal attribution rules to determine common ownership but that is not final
  • Proposed rules will be issued in 3 parts, the first of each month January through March
  • Sometime in November the Department of Revenue will be sending an information letter to taxpayers that have business income, without regard to whether they meet any of the above thresholds
  • Rules are not yet available, and we are only able to estimate worst case scenarios until the rules are completed
  • The Department of Revenue expects to release proposed rules monthly in three parts beginning in early January 2020

We will keep you updated as information becomes available.  Check our blog, follow us on LinkedIn, or contact your tax professional at Delap to stay updated!